China

Yardeni Research, Inc.

April 14, 2011

Dr. Edward Yardeni

516-972-7683
eyardeni@yardeni.com

Mali Quintana
480-664-1333
aquintana@yardeni.com

Please visit our sites at

www.yardeni.com
blog.yardeni.com

thinking outside the box

Table Of Contents Table Of Contents
Economic Indicators 1
Industrial Production 2
Electricity 3
China Manufacturing PMI 4-6
China Autos 7
Oil Demand 8
China: Exports & Imports 9-10
Railways Traffic 11
China: Consumer Price Index 12-14
China vs. US Inflation 15-16
Residential Property Prices 17
Stock Market 18
Money Growth & Inflation 19
Bank Loans & Money Supply 20-21
Monetary Policy 22
PBOC Balance Sheet 23-24
China: Bank Reserves 25
Exchange Rate 26
International Reserves 27
China’s Monetary Ratios 28
China vs. US Monetary Indicators 29-30
US Capital Inflows: China 31
Population 32-34
Unemployment & Productivity 35

April 14, 2011 / China Yardeni Research, Inc.

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 - Economic Indicators -
Figure 1.
14 40
CHINA REAL GDP vs. ELECTRICITY OUTPUT
(yearly percent change)
12 30

10 Q4 20

8 Feb 10
Real GDP
6 Electricity Output(3-ma) 0

4 -10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

36 36
CHINA INDUSTRIAL PRODUCTION vs. ELECTRICITY OUTPUT
30 (yearly percent change in 3-ma) 30
24 24
18 18
Feb
12 12
6 6
0 0
Industrial Production
-6 -6
Electricity Output
-12 -12
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

50 50
CHINA GDP & MERCHANDISE EXPORTS
(yearly percent change)
30 30
Mar

10 10

-10
Nominal GDP -10
Merchandise Exports
(in 3-ma)
-30 -30
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

40 40
CHINA GDP & OIL DEMAND
35 (yearly percent change) 35
Nominal GDP
30 30
25 Crude Oil Demand 25
(in 12-ma)
20 20
15 15
10 10
Feb
5 5
0 0
yardeni.com
-5 -5
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: China Customs/Haver Analytics.

Page 1 / April 14, 2011 / China Yardeni Research, Inc.

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 - Industrial Production -
Figure 2.
230 230
CHINA: INDUSTRIAL PRODUCTION: VALUED ADDED
220 (2005=100, sa) Feb 220
210 210
200 200
190 190
180 180
170 170
160 160
150 150
140 140
130 130
120 120
110 110
100 100
90 90
80 80
70 70
60 60
50 50
40 40
yardeni.com
30 30
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: IMF International Financial Statistics.

Figure 3.
25 25
CHINA: INDUSTRIAL PRODUCTION: VALUED ADDED
(yearly percent change)

20 20

15 15
Feb

10 10

5 5

yardeni.com
0 0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: IMF International Financial Statistics.

Page 2 / April 14, 2011 / China Yardeni Research, Inc.

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 - Electricity -
Figure 4.
4200 4200
CHINA: ELECTRICITY OUTPUT
(100 Million KWH)
3900 3900

3600 3600

3300 3300
Feb
3000 3000

2700 2700

2400 2400

2100 2100

1800 Actual 1800

12-month average
1500 1500

1200 1200

yardeni.com
900 900
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Haver Analytics and China National Bureau of Statistics.

Figure 5.
35 35
CHINA: ELECTRICITY OUTPUT
(yearly percent change in 12-month moving average)
30 30

25 25
in 3-month moving average

20 20

15 15

Feb
10 10

5 5

0 0

-5 -5

yardeni.com
-10 -10
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Haver Analytics and China National Bureau of Statistics.

Page 3 / April 14, 2011 / China Yardeni Research, Inc.

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 - China Manufacturing PMI -
Figure 6.
65 65
CHINA MANUFACTURING PURCHASING MANAGERS INDEX
60
(sa) 60

55 55
Mar
50 50

45 Composite 45

40 40

35 35
2006 2007 2008 2009 2010 2011

70 70

60 60
Mar

50 50

Output
40 40
New Orders

30 30
2006 2007 2008 2009 2010 2011

70 70

60 60
Mar
50 50

40 New Orders 40

Export Orders
30 30

20 20
2006 2007 2008 2009 2010 2011

15 15

New Orders minus

10 Export Orders 10

5 5
Mar

0 0

yardeni.com
-5 -5
2006 2007 2008 2009 2010 2011

Source: China Federation Logistics & Purchasing/Haver Analytics

Page 4 / April 14, 2011 / China Yardeni Research, Inc.

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 - China Manufacturing PMI -
Figure 7.
70 60
CHINA MANUFACTURING PURCHASING MANAGERS INDEX
(sa)
60
50
Mar
50

Imports 40
40

30 30
2006 2007 2008 2009 2010 2011

55 55

Mar
50 50

45
Employment 45

40 40
2006 2007 2008 2009 2010 2011

60 60

55 55

Mar
50 50

45 Stocks of Orders/ 45
Purchases
40 40

35 35
2006 2007 2008 2009 2010 2011

70 70

60 60

Mar
50 50

Quantity of
Purchases
40 40

yardeni.com
30 30
2006 2007 2008 2009 2010 2011

Source: China Federation Logistics & Purchasing/Haver Analytics

Page 5 / April 14, 2011 / China Yardeni Research, Inc.

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 - China Manufacturing PMI -
Figure 8.
54 54
CHINA MANUFACTURING PURCHASING MANAGERS INDEX
(sa)
52 52

Mar
50 50

Suppliers’
Delivery Times
48 48

46 46
2006 2007 2008 2009 2010 2011

52 52
Mar

50 50
Stock of Finished
Goods
48 48

46 46

44 44

42 42
2006 2007 2008 2009 2010 2011

55 55

Mar
50 50

45 45

Stock of Raw
Materials
40 40

35 35
2006 2007 2008 2009 2010 2011

80 80

70 Mar 70

60 60

50 50

40
Purchase Price 40

30 30
yardeni.com
20 20
2006 2007 2008 2009 2010 2011

Source: China Federation Logistics & Purchasing/Haver Analytics

Page 6 / April 14, 2011 / China Yardeni Research, Inc.

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 - China Autos -
Figure 9.
2.2 2.2
CHINA: AUTOMOBILE SALES & PRODUCTION
(million units, nsa)
2.0 2.0

1.8 Mar 1.8

1.6 1.6
Sales
1.4 Production 1.4

1.2 1.2

1.0 1.0

.8 .8

.6 .6

.4 .4

yardeni.com
.2 .2
2005 2006 2007 2008 2009 2010 2011

Source: China Association of Automobile Manufacturers.

Figure 10.
150 150
CHINA: AUTOMOBILE SALES & PRODUCTION
(yearly percent change)

100 100

Sales
Production

50 50

Mar
0 0

yardeni.com
-50 -50
2005 2006 2007 2008 2009 2010 2011

Source: China Association of Automobile Manufacturers.

Page 7 / April 14, 2011 / China Yardeni Research, Inc.

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 - Oil Demand -
Figure 11.
9.8 9.8
CHINA: CRUDE OIL DEMAND
9.4 (millions of barrels per day, 12-month avg) Feb 9.4
9.0 9.0
8.6 8.6
8.2 8.2
7.8 7.8
7.4 7.4
7.0 7.0
6.6 6.6
6.2 6.2
5.8 5.8
5.4 5.4
5.0 5.0
4.6 4.6
4.2 4.2
3.8 3.8
3.4 3.4
3.0 3.0
2.6 2.6
2.2 2.2
yardeni.com
1.8 1.8
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Source: Oil Market Intelligence.

Figure 12.
40 40
CHINA: CRUDE OIL DEMAND
(yearly percent change)

30 30

20 20

10 10
Feb

0 0

-10 -10

yardeni.com
-20 -20
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Source: Oil Market Intelligence.

Page 8 / April 14, 2011 / China Yardeni Research, Inc.

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 - China: Exports & Imports -
Figure 13.
2500 280
2100 CHINA MERCHANDISE TRADE* Feb 225
(billion dollars, saar, ratio scale) Mar
1700 170
1300 Telecommunication & 115
Sound Recording
900 Total
_____ Equipment
Exports 60

500 Imports

100 5
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
1030 100.5
905 80.5
780 Feb
60.5
655 Feb
530 40.5
Machinery &
405 Transport Equipment
20.5
280

155
Professional & Scientific
Instrutments & Apparatus

30 .5
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
383 122
308 102
82
233
Feb 62
158 Feb
42

83 Iron & Steel 22

Electrical Machinery,
Apparatus, & Appliances

yardeni.com
8 2
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

* Excluding Hong Kong.

Source: China Customs/Haver Analytics.

Page 9 / April 14, 2011 / China Yardeni Research, Inc.

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 - China: Exports & Imports -
Figure 14.
408 260
358 CHINA MERCHANDISE TRADE 240
308 Mar 220
258
(billion dollars, saar, ratio scale) 200
180
208 160
With US
_______ With Japan
__________ Mar
158 140
Exports Exports 120
108
Imports Imports 100
80
58
60

40

8 20
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
400 1400
Mar 1300
350 1200

Mar 1100
300
1000
With EU
_______ With Rest of World
_______________
250 900
Exports Exports 800
200 Imports Imports 700
600
150 500
400
100
300

50 200
100
yardeni.com
0 0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Source: China Customs/Haver Analytics.

Page 10 / April 14, 2011 / China Yardeni Research, Inc.

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 - Railways Traffic -
Figure 15.
3.5 3.5
CHINA: FREIGHT TRAFFIC: RAILWAYS
(100 million tons)

3.0 3.0
Feb

2.5 2.5

2.0 2.0

1.5 1.5

yardeni.com
1.0 1.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: China National Bureau of Statistics.

Figure 16.
20 20
CHINA: PASSENGER TRAFFIC: RAILWAYS
(100 million persons, 12-month sum)

18 18
Feb

16 16

14 14

12 12

10 10

yardeni.com
8 8
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: China National Bureau of Statistics.

Page 11 / April 14, 2011 / China Yardeni Research, Inc.

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 - China: Consumer Price Index -
Figure 17.
10 10
CHINA: CONSUMER PRICE INDEX
8 (yearly percent change) 2010 Target (3%) 8
2011 Target (4%)
6 6
Feb
4 4

2 2

0 0

-2 -2

-4 -4
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

3 3
Feb
2 2

1 1
Excluding Food
0 0

-1 -1

-2 -2

-3 -3
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

12 12

10 10

8 8

6 Consumer Goods 6
Feb
4 4

2 2

0 0

-2 -2
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

5 5

4 Feb 4

3 3

2 2
Services
1 1

0 0

-1 -1
yardeni.com
-2 -2
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Source: Haver Analytics.

Page 12 / April 14, 2011 / China Yardeni Research, Inc.

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 - China: Consumer Price Index -
Figure 18.
40 6
CHINA: CONSUMER PRICE INDEX
30
(yearly percent change)
Medicine, Medical Care & 4
20 Personal Articles
Feb
10 Feb 2

0
0
-10 Fuel & Power

-20 -2
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

4 2

Feb 0
2

Clothing -2
Feb
0
-4
Transportation &
-2 Communication
-6

-4 -8
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

10 12
10
Feb 8
5
Recreation, Education & 6
Cultural Services
4
0
2
Feb 0
-5
Housing
-2
-4
-10 -6
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

4 4

3
2
Household Facilities, Feb
Articles & Repair Services Tobacco & Feb 2
0 Liquor Products
1

-2
0

yardeni.com
-4 -1
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Source: Haver Analytics.

Page 13 / April 14, 2011 / China Yardeni Research, Inc.

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 - China: Consumer Price Index -
Figure 19.
30 60
CHINA: CONSUMER PRICE INDEX
(yearly percent change) Fresh Vegetables 50

40
20
Food
30

20
Feb
10
10
Feb
0
0
-10

-20

-10 -30
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
60 60

50

40
40 Meat, Poultry & Fresh Fruits
Related Products Feb 30

20
20
10
Feb
0
0
-10

-20

-20 -30
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
40 50

40
30 Eggs
30
Grain
20
Feb 20
Feb
10 10

0
0
-10
-10
-20

yardeni.com
-20 -30
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Source: Haver Analytics.

Page 14 / April 14, 2011 / China Yardeni Research, Inc.

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 - China vs. US Inflation -
Figure 20.
10 10
CONSUMER PRICE INDEX
(yearly percent change)

8 8

6 6

Feb

4 4

2 Feb 2

0 0

China
-2 US -2

yardeni.com
-4 -4
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Bureau of Labor Statistics and China National Bureau of Statistics.

Figure 21.
26 26
CONSUMER PRICE INDEX: FOOD
24 (yearly percent change) 24
22 22
20 20
China: Food
18 18
US: Food at Home
16 16
14 14
12 12
Feb
10 10
8 8
6 6
4 4
Feb
2 2
0 0
-2 -2
-4 -4
-6 -6
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Bureau of Labor Statistics and China National Bureau of Statistics.

Page 15 / April 14, 2011 / China Yardeni Research, Inc.

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 - China vs. US Inflation -
Figure 22.
6 6
CONSUMER PRICE INDEX EX FOOD
(yearly percent change)

4 4

Feb
2 2

0 0

-2 China -2
US

-4 -4
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Bureau of Labor Statistics and China National Bureau of Statistics.

Figure 23.
12 12
PRODUCER PRICE INDEX
(yearly percent change)
10 10

8 8
Feb
6 Feb 6

4 4

2 2

0 0

-2 -2

-4 -4
China: Total Industrial Products
-6 -6
US: Finished Goods
-8 -8

-10 -10
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Bureau of Labor Statistics and China National Bureau of Statistics.

Page 16 / April 14, 2011 / China Yardeni Research, Inc.

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 - Residential Property Prices -
Figure 24.
16 16
CHINA: RESIDENTIAL PROPERTY PRICES
(yearly percent change)
14 14

12 12

10 10

8 8
Dec

6 6

4 4

2 2

0 0

-2 -2

yardeni.com
-4 -4
2007 2008 2009 2010 2011

Source: China National Bureau of Statistics.

Figure 25.
20 20
CHINA: RESIDENTIAL PROPERTY PRICES
(yearly percent change)

15 15
Economic

Common
High Class
10 Residential Building 10

Dec

5 5

0 0

yardeni.com
-5 -5
2007 2008 2009 2010 2011

Source: China National Bureau of Statistics.

Page 17 / April 14, 2011 / China Yardeni Research, Inc.

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 - Stock Market -
Figure 26.
6000 6000
CHINA: SHANGHAI-SHENZHEN 300
(12/31/2004=1000)
5500 5500

5000 5000

4500 4500

4000 4000

3500 3500
4/14

3000 3000

2500 2500

2000 2000

1500 1500

1000 200-day moving average. 1000

yardeni.com
500 500
2005 2006 2007 2008 2009 2010 2011 2012

Source: Haver Analytics.

Figure 27.
40 4.8
CHINA STOCK MARKET vs. COPPER FUTURES PRICE
4.6
4.4
4.2
35
4.0
4/14
3.8
3.6
30 3.4
3.2
3.0

25 2.8
2.6

China: Shanghai-Shenzhen 300 2.4

(12/31/2004=1000) 2.2
20
2.0
Copper Futures Price*
(dollars per pound) 1.8
1.6
yardeni.com
15 1.4
I II III IV I II III IV I II III IV
2009 2010 2011
* Nearby contract.
Source: Haver Analytics.

Page 18 / April 14, 2011 / China Yardeni Research, Inc.

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 - Money Growth & Inflation -
Figure 28.
40 40
CHINA: M1 & CPI
(yearly percent change)
36 36
Consumer Price Index
32 32
M1*
(pushed ahead 12 months)
28 28

24 24

20 20

16 Mar 16

12 12

8 8

Feb
4 4

0 0

yardeni.com
-4 -4
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

* In yuan.
Source: China National Bureau of Statistics.

Figure 29.
40 40
CHINA: M2 & CPI
(yearly percent change)
36 36
Consumer Price Index
32 32
M2*
(pushed ahead 12 months)
28 28

24 24

20 20

16 Mar 16

12 12

8 8

Feb
4 4

0 0

yardeni.com
-4 -4
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

* In yuan.
Source: China National Bureau of Statistics.

Page 19 / April 14, 2011 / China Yardeni Research, Inc.

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 - Bank Loans & Money Supply -
Figure 30.
12 12
CHINA & US: M2 & BANK LOANS Mar
(trillion US dollars)
11 11

10 China: M2 10
China: Commercial Bank Loans
9 9

US: M2
8 8
US: Commercial Bank Loans
7 7

6 6

5 5

4 4

3 3

2 2

yardeni.com
1 1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: People’s Bank of China.

Figure 31.
40 40
CHINA: M2 & BANK LOANS*
(yearly percent change)

35 35

30 M2 30

Commercial Bank Loans

25 25

Mar
20 20

15 15

10 10

yardeni.com
5 5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

* In dollars.
Source: People’s Bank of China.

Page 20 / April 14, 2011 / China Yardeni Research, Inc.

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 - Bank Loans & Money Supply -
Figure 32.
3000 3000
CHINA: M2
(monthly change in billions)
Mar
2000 2000
in yuan

1000 1000

0 0

-1000 -1000
400 400
Mar
300 300

200 in dollars 200

100 100

0 0

yardeni.com
-100 -100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: People’s Bank of China.

Figure 33.
2000 2000
CHINA: COMMERCIAL BANK LOANS
(monthly change in billions)
1500 1500

1000 1000
in yuan

500 Feb 500

0 0

-500 -500
300 300

200 200

in dollars
100 Feb 100

0 0

yardeni.com
-100 -100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: People’s Bank of China.

Page 21 / April 14, 2011 / China Yardeni Research, Inc.

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 - Monetary Policy -
Figure 34.
22 22
CHINA: REQUIRED RESERVE RATIO
21 21
20 4/5 20
19 19
Large Depository Institutions
18 18
4/5
17 Small/Medium Depository Institutions 17
16 16
15 15
14 14
13 13
12 12
11 11
10 10
9 9
8 8
7 7
6 6
yardeni.com
5 5
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Source: People’s Bank of China.

Figure 35.
14 14
CHINA: PRIME LENDING RATE
(percent)

12 12

10 10

8 8

6 Mar 6

yardeni.com
4 4
74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Source: Haver Analytics.

Page 22 / April 14, 2011 / China Yardeni Research, Inc.

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 - PBOC Balance Sheet -
Figure 36.
5.1 5.1
4.6 PBOC ASSETS & LIABILITIES 4.6
4.1 (trillion dollars, nsa, ratio scale) Jan 4.1
3.6 3.6
3.1 3.1
2.6 2.6
2.1 2.1

1.6 1.6

1.1 1.1

.6 .6

Total Assets

Foreign Exchange Assets

Deposits of Financial Institutions

yardeni.com
.1 .1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: People’s Bank of China.

Figure 37.
2.3 2.3
2.1 PBOC LIABILITIES Dec 2.1
1.9 (trillion dollars, nsa, ratio scale) 1.9
1.7 1.7
1.5 1.5
1.3 1.3
1.1 1.1

.9 .9

.7 .7

.5 .5

.3 Deposits of Financial Institutions .3

All Other Liabilities*

yardeni.com
.1 .1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

* Total Liabilities minus Deposits of Financial Institutions.

Source: People’s Bank of China.

Page 23 / April 14, 2011 / China Yardeni Research, Inc.

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 - PBOC Balance Sheet -
Figure 38.
3.6 3.6
3.1 PBOC ASSETS Jan 3.1
(trillion dollars, nsa, ratio scale)
2.6 2.6
2.1 2.1

1.6 1.6

1.1 1.1

.6 .6

Foreign Exchange
_______________
Foreign Exchange Held by PBOC
Nongold International Reserves
Held by China (IMF data)

yardeni.com
.1 .1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: People’s Bank of China and IMF.

Figure 39.
85 85
PBOC ASSETS
(percent)
80 80
Jan

75 Foreign Exchange Held/Total PBOC Assets 75

70 70

65 65

60 60

55 55

50 50

45 45

40 40

yardeni.com
35 35
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: People’s Bank of China and IMF.

Page 24 / April 14, 2011 / China Yardeni Research, Inc.

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 - China: Bank Reserves -
Figure 40.
3 3
CHINA: TOTAL vs. REQUIRED RESERVES AT BANKS
(trillion dollars, nsa)

Mar
2 2

Deposits of Financial Institutions

at PBOC

M2 minus Currency times

Reserve Requirement Ratio
of Large Banks
1 1

yardeni.com
0 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: People’s Bank of China.

Figure 41.
.4 .4
CHINA: EXCESS RESERVES
(trillion dollars, nsa)

.3 .3

.2 .2

Dec

.1 .1

.0 .0

yardeni.com
-.1 -.1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: People’s Bank of China.

Page 25 / April 14, 2011 / China Yardeni Research, Inc.

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 - Exchange Rate -
Figure 42.
6.0 6.0
CHINA: FOREIGN EXCHANGE RATE
(Yuan/$)

6.5 6.5
4/8

7.0 7.0

7.5 7.5

8.0 8.0

yardeni.com
8.5 8.5
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Morgan Stanley Capital International.

Figure 43.
1610 1610
1410 MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES 1410
1210 (billion dollars, nsa, ratio scale) Jan 1210
1010 1010
810 810
610 610
China + Hong Kong
410 410
China

Hong Kong
210 210

yardeni.com
10 10
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: US Department of the Treasury, Office of International Affairs.

Page 26 / April 14, 2011 / China Yardeni Research, Inc.

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 - International Reserves -
Figure 44.
3000 3000
CHINA: INTERNATIONAL RESERVES Dec
(billion dollars, nsa)

2500 2500

2000 2000

Non-Gold International Reserves (IMF)

1500 Holdings of US Treasury Securities* 1500

Jan
1000 1000

500 500

yardeni.com
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

* Includes private and official accounts.

Source: US Department of the Treasury, Office of International Affairs and International Monetary Fund.

Figure 45.
600 600
CHINA: INTERNATIONAL RESERVES
550 (billion dollars, yearly change) 550

500 500

450 Dec 450

400 400

350 Non-Gold International Reserves (IMF) 350

300 Holdings of US Treasury Securities* 300

Jan
250 250

200 200

150 150

100 100

50 50

0 0

-50 -50

-100 -100
yardeni.com
-150 -150
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

* Includes private and official accounts.

Source: US Department of the Treasury, Office of International Affairs and International Monetary Fund.

Page 27 / April 14, 2011 / China Yardeni Research, Inc.

www.yardeni.com
 - China’s Monetary Ratios -
Figure 46.
11.4 11.4
CHINA: M2
(as a ratio of nongold international reserves)
10.4 10.4

9.4 9.4

8.4 8.4

7.4 7.4

6.4 6.4

5.4 5.4

4.4 4.4
Dec
3.4 3.4
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

8.0 8.0
CHINA: BANK LOANS
7.5 (as a ratio of nongold international reserves) 7.5
7.0 7.0
6.5 6.5
6.0 6.0
5.5 5.5
5.0 5.0
4.5 4.5
4.0 4.0
3.5 3.5
3.0 3.0
2.5 Dec 2.5
2.0 2.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

.81 .81
CHINA: BANK LOANS
.79 (as a ratio of M2) .79

.77 .77

.75 .75

.73 .73

.71 .71

.69 .69

.67 .67
Feb
.65 .65
yardeni.com
.63 .63
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: People’s Bank of China.

Page 28 / April 14, 2011 / China Yardeni Research, Inc.

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 - China vs. US Monetary Indicators -
Figure 47.
12 12
M2
11 (trillion US dollars) 11

10 10
China
9 Feb 9

8 US 8

7 7

6 6

5 5

4 4

3 3

2 2

1 1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

8 8
BANK LOANS
(trillion US dollars) Feb

6 China 6

US

4 4

2 2

0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

5 5
CENTRAL BANK ACCOUNTS
(trillion US dollars)

4 Jan 4

China’s Total Assets

3 US Fed’s Total Assets 3
Mar

2 2

1 1

yardeni.com
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Board of Governors of the Federal Reserve and People’s Bank of China.

Page 29 / April 14, 2011 / China Yardeni Research, Inc.

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 - China vs. US Monetary Indicators -
Figure 48.
150 150
CHINA M2
(as a percent of US M2)
130 130
Feb

110 110

90 90

70 70

50 50

30 30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

120 120
CHINA BANK LOANS
(as a percent of US Bank Loans) Feb

100 100

80 80

60 60

40 40

20 20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

350 350
TOTAL ASSETS OF PEOPLE’S BANK OF CHINA
(as a percent of US Fed’s Total Assets)
300 300

250 250

200 200

Jan
150 150

100 100

yardeni.com
50 50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Board of Governors of the Federal Reserve and People’s Bank of China.

Page 30 / April 14, 2011 / China Yardeni Research, Inc.

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 - US Capital Inflows: China -
Figure 49.
500 500
NET SECURITIES PURCHASES BY FOREIGNERS FROM US RESIDENTS: CHINA
400 (billion dollars) 400
Grand Total*
__________
300 300
12-month sum
200 200
3-month sum annual rate
100 100
0 Jan 0
-100 -100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

15 15

10 10
US Corporate Stocks
_________________
5 5
Jan
0 0

-5 -5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

300 300

200
US Treasury Bonds & Notes
_______________________ 200

100 100
Jan
0 0

-100 -100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

200 200
US Government Agency Bonds
_________________________
100 100

0 0
Jan

-100 -100

-200 -200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

100 100
80 80
60 60
US Corporate Bonds
_________________
40 40
20 20
0 Jan 0
yardeni.com
-20 -20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

* Includes Treasury bonds and notes, government agency bonds, U.S. corporate bonds, U.S. corporate stocks, foreign bonds, and foreign stocks.
Source: US Department of the Treasury, Office of International Affairs.

Page 31 / April 14, 2011 / China Yardeni Research, Inc.

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 - Population -
Figure 50.
1.6 1.6
CHINA: POPULATION & PROJECTIONS
1.5
(billions of persons) 1.5

1.4 2050 1.4

1.3 1.3

1.2 1.2

1.1 1.1

yardeni.com
1.0 1.0

.9 .9

.8 .8

.7 .7

.6 .6

.5 .5

.4 .4
19

19

19

19

19

19

19

19

19

19

20

20

20

20

20

20

20

20

20

20

20

20

20
50

55

60

65

70

75

80

85

90

95

00

05

10

15

20

25

30

35

40

45

50

55

60
Source: United Nations World Population Prospects.

Figure 51.
250 250
CHINA: POPULATION
(10-year change, millions of persons)

200 200

yardeni.com

150 150

100 100

2010

50 50
60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Source: State Statistical Bureau of the People’s Republic of China.

Page 32 / April 14, 2011 / China Yardeni Research, Inc.

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 - Population -
Figure 52.
25 25
CHINA: RURAL POPULATION
(yearly change in millions)
20 20

15 15

10 10

5 5

0 0

-5 -5

2009
-10 -10

-15 -15

yardeni.com
-20 -20
50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Source: United Nations World Population Prospects, World Urbanization Prospects and Haver Analytics.

Figure 53.
30 30
CHINA: URBAN POPULATION
(yearly change in millions)
25 25

20 20

15 2009 15

10 10

5 5

0 0

-5 -5

-10 -10

yardeni.com
-15 -15
50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Source: State Statistical Bureau of the People’s Republic of China.

Page 33 / April 14, 2011 / China Yardeni Research, Inc.

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 - Population -
Figure 54.
94 94
92
CHINA: RURAL POPULATION 92
(as a percent of total population)
90 90
88 88
86 86
84 84
82 82
80 80
78 78
76 76
74 74
72 72
70 70
68 68
66 66
64 64
62 62
60 60
58 58
56 56
54 2009 54
yardeni.com
52 52
50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Source: State Statistical Bureau, People’s Republic of China.

Figure 55.
80 80
CHINA: URBAN POPULATION
(as a percent of total population) 2055

60 60
yardeni.com

40 40

20 20

0 0
19

19

19

19

19

19

19

19

19

19

20

20

20

20

20

20

20

20

20

20

20

20

20
5

70

75

80

85

90

95

00

05

10

15

20

25

30

35

40

45

50

55

60
0

Source: United Nations World Population Prospects: 2006 Revisions, and World Urbanization Prospects: 2007 Revision.

Page 34 / April 14, 2011 / China Yardeni Research, Inc.

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 - Unemployment & Productivity -
Figure 56.
6 6
CHINA: UNEMPLOYMENT RATE IN URBAN AREAS
(percent)

5 5

2010
4 4

yardeni.com
3 3

2 2

1 1
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Source: State Statistical Bureau, People’s Republic of China.

Figure 57.
20 20
CHINA: LABOR PRODUCTIVITY
(yearly percent change)

15 15

10 10
2009

5 5

0 0

-5 -5

-10 -10

yardeni.com
-15 -15
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Source: China National Bureau of Statistics/Haver Analytics.

Page 35 / April 14, 2011 / China Yardeni Research, Inc.

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